With the increasing government control of crypto exchanges, crypto traders are increasingly fleeing traditional exchanges to decentralized exchanges, raising concerns about the government’s inability to fully regulate them.

As the saying goes

When you hope to control human freedom or finance, you may end up with nothing left to control.

Definition decentralized exchange (DEX)

A decentralized exchange (or DEX) is a peer-to-peer marketplace where transactions occur directly between crypto traders. DEXs fulfill one of crypto’s core possibilities: fostering financial transactions that aren’t officiated by banks, brokers, or any other intermediary. Many popular DEXs, like Uniswap and Pancakeswap, run on the Ethereum, BSC blockchain.

What is Decentralized exchange?

A Decentralized Exchange (DEX) is a type of cryptocurrency trading platform that operates without a central authority.
Instead of relying on a company or intermediary to hold your funds and match trades, a DEX uses blockchain-based smart contracts to let users trade peer-to-peer (P2P) directly from their own wallets.

Here are decentralized exchange key points:

1. No Central Custody
   You keep control of your private keys and funds at all times.
2. Runs on Smart Contracts
   Trades are executed automatically on the blockchain (often on networks like Ethereum, BNB Chain, or Solana).
3. Permissionless
   Anyone with a crypto wallet can use it; no need for account approval or identity verification (KYC) in most cases.
4. Transparency
   All transactions are visible on the blockchain.
5. Examples Top DEX in the world right now
   Uniswap, PancakeSwap, Curve, SushiSwap.

Advantages of Decentralized Exchange (DEX) that make it popular.

• Users control their assets themselves – no need to deposit coins with the platform, reducing the risk of hacking or service provider shutdowns.
• High privacy – Most do not require KYC (identity verification) – simply connect your wallet and start trading.
• Open access for everyone – accessible worldwide, with a wallet and internet connection.
• Transparency – All transactions are recorded on the blockchain and verifiable in real time.
• Reduced risk of centralized control – No single entity controls or blocks usage.
• Diversified assets – New coins or tokens are often available for trading before they are listed on the CEX market.
• Opportunity to join a liquidity pool and earn returns – Users can deposit coins for liquidity and earn trading fees.

Disadvantages of Decentralized Exchange

Slower than centralized exchanges, less beginner-friendly, and you can’t usually trade with fiat directly.

How do Decentralized exchange work?

Unlike centralized exchanges like Binance, Decentralized exchange don’t allow for exchanges between fiat and crypto — instead, they exclusively trade cryptocurrency tokens for other cryptocurrency tokens. Via a centralized exchange (or CEX), you can trade fiat for crypto (and vice versa) or crypto-crypto pairs — say some of your bitcoin for ETH. You can also often make more advanced moves, like margin trades or setting limit orders. But all of these transactions are handled by the exchange itself via an “order book” that establishes the price for a particular cryptocurrency based on current buy and sell orders — the same method used by stock exchanges like Nasdaq.

Decentralized exchanges, on the other hand, are simply a set of smart contracts. They establish the prices of various cryptocurrencies against each algorithmically and use “liquidity pools” — in which investors lock funds in exchange for interest-like rewards — to facilitate trades.

While transactions on a centralized exchange are recorded on that exchange’s internal database, Decentralized exchange DEX transactions are settled directly on the blockchain.

Decentralized exchnage DEXs are usually built on open-source code, meaning that anyone interested can see exactly how they work. That also means that developers can adapt existing code to create new competing projects — which is how Uniswap’s code has been adapted by an entire host of DEXs with “swap” in their names like Sushiswap and Pancakeswap.

What are potential benefits of using a Decentralized exchange (DEX)?

Vast variety: If you’re interested in finding a hot token in its infancy, DeFi is the place to be. DEXs offer a virtually limitless range of tokens, from the well-known to the weird and totally random. That’s because anyone can mint an Ethereum-based token and create a liquidity pool for it, so you’ll find a greater array of projects, both vetted and unvetted And this is the truly free world of trading.

Hacking risks be less than Centralized exchange Because all of the funds in a Decentralized exchange (DEX) trade are stored on the traders’ own wallets, they are theoretically less susceptible to a hack. (Relatedly, Decentralized exchange DEXs also reduce what is known as “counterparty risk,” which is the likelihood that one of the involved parties — including potentially the central authority in a non-DeFi transaction — will default.)

Anonymity: No personal information is required to use most popular decentralized exchange.

Utility in the developing world: The peer-to-peer lending, speedy transactions, and anonymity made possible by Decentralized exchange DEXs have made them increasingly popular in developing economies — where solid banking infrastructure might not be available. Anyone with a smartphone and an internet connection can trade via a Decentralized exchange (DEX).

How do you interact with a Decentralized Exchange?

You can connect to a Decentralized exchange (DEX) like Uniswap using a crypto wallet such as Metamask Wallet in either your web browser or on your smartphone. If you are just getting started we recommend using the Metamask dapp wallet, available directly within your Metamask app

You’ll also need a supply of Ethereum or other tokens to start trading on most Decentralized exchange (DEXs) which you can get from an exchange like Binance, P2P. The reason you need some ETH, BNB is for paying fees (known as gas) that are required for any transaction that happens on the Ethereum, BSC blockchain. These are separate from the fees the Decentralized exchange DEX itself charges.

How do Decentralized exchange (DEXs) fees work?

Fees vary. Pancakeswap charges a 0.01% fee that is split between liquidity providers, and a protocol fee could be added in the future. But it’s important to note that the fees the decentralized exchange DEX charges can be dwarfed by gas fees to use the Ethereum network. The ongoing ETH2 upgrade (as well as a number of “layer 2” solutions like Optimism and Polygon) are designed in part to lower fees and speed up transactions.

Top 5 Decentralized Exchanges in the World

According to CoinGecko (latest update), the top 5 DEXs by 24-hour trading volume are as follows

No1. Pancakeswap Decentralized exchange

PancakeSwap is currently the world’s largest DEX by trading volume, accounting for approximately 29.5% of the total DEX market as of August 10, 2025.

PancakeSwap is a decentralized exchange (DEX) running on the BNB Smart Chain (BSC), which allows users to exchange tokens peer-to-peer (P2P) without intermediaries, and supports other DeFi functions such as farming and staking.

PancakeSwap DEX Highlights

1. Low fees
   Running on the BNB Smart Chain, average fees are just a few cents.
2. High speed
   Transactions take only a few seconds.
3. Supports a wide range of tokens
   including BSC tokens and tokens from other networks via bridges.
4. Comprehensive DeFi features.
   Swap: Exchange tokens via an AMM (Automated Market Maker).
   Liquidity Pool: Deposit token pairs to earn trading fees.
   Yield Farming: Farm coins for a yield of CAKE tokens.
   Staking (Syrup Pools): Stake CAKE coins for rewards.
   Lottery, Prediction, NFT Marketplace.
5. The primary token is CAKE
   used to pay fees, earn rewards, and be used in governance systems.
6. Community-driven
   Developed by a team that releases code and updates it through voting by CAKE holders.

Latest Important Information (PancakeSwap V3)

• Main Network: BNB Smart Chain (and supports multichains such as Ethereum, Aptos, and Base)
• Trading Fees: Starting at 0.01%
• Current DEX Market Share: Approximately 29.5% of total DEX trading volume
• Popularity: The world’s #1 DEX by 24-hour trading volume

No.2 Uniswap Decentralized exchange

Uniswap ranks second with approximately 7.3% of the total market capitalization.

Uniswap is a decentralized exchange (DEX) running on the Ethereum network and using an automated market maker (AMM) mechanism instead of the order book system of a stock exchange or a centralized exchange (CEX).

First launched in 2018 by Hayden Adams, it is currently one of the largest and most influential DEXs in the DeFi world.

Uniswap DEX Highlights

1. AMM Model – Use the formula
   x×y=k calculate the token price in the Liquidity Pool instead of matching buy/sell orders.
2. Open to everyone to increase liquidity
   Users can deposit tokens into pairs (e.g. ETH/USDC) to earn a share of the fees.
3. 100% Transparent
   All transactions and smart contracts are verifiable on the blockchain.
4. The main token is UNI.
   It is used to vote on protocol development (Governance) and has the right to determine the direction of the platform.
5. Multi-chain
   Although it started on Ethereum, it has now expanded to Optimism, Arbitrum, Polygon, BNB Chain, and other networks.
6. No central control
   There is no central server or individual that can stop operations.

Uniswap’s evolution

• V1 (2018) – Basic Swap and Liquidity Pool System Launched
• V2 (2020) – Supports direct trading of ERC-20 tokens with Flash Swaps feature.
• V3 (2021) – Added Concentrated Liquidity, allowing liquidity providers to choose their preferred investment price range to increase capital efficiency.
• V4 (Development/Test) – Added “Hooks” capabilities to enable the creation of additional AMM features, such as Dynamic Fees or On-chain Limit Orders.

No.3 Orca Decentralized exchange

Orca Decentralized Exchange is ranked 3rd with a market share of approximately 5.8%, according to the latest data.

Orca — A leading DEX (Decentralized Exchange) on the Solana blockchain, designed to be easy to use for both new and experienced users.

Orca is a decentralized digital asset exchange (DEX) on Solana using an Automated Market Maker (AMM) model that emphasizes simplicity and speed.

Orca DEX Highlights

1. High Speeds and Low Fees
   Take advantage of Solana’s capabilities for ultra-fast exchanges (<1 second) and ultra-low fees.
2. Concentrated Liquidity & Whirlpools
   Designed to allow liquidity providers to focus on desired price ranges for higher capital efficiency and reduced slippage.
3. Fair Price Indicator
   Displays fair price conditions relative to the market to help users avoid bad prices or high slippage.
4. User-friendly UI
   Features like the “Magic Bar” to easily search and trade tokens, as well as a Portfolio Tracker.
5. Innovative “Double Dip Pools”
   Liquidity providers can receive rewards for more than one token, such as ORCA and tokens from other projects, simultaneously.

No.4 Aerodrome SlipStream Decentralized exchange

Aerodrome SlipStream is ranked 4th according to the latest data with a total market share of approximately 5.2%.

Aerodrome is a MetaDEX (decentralized exchange) built on the Base network, combining the strengths of Curve, Convex and Uniswap into a single protocol to serve as Base’s liquidity hub, featuring

• Uses various AMM structures: vAMM (Uniswap V2), sAMM (Curve), clAMM (Uniswap V3).
• There is a veAERO voting system where users lock AERO tokens to determine the distribution of rewards.
• The Auto-Voting system enables automatic voting and reward compounding.
• It boasts a TVL that is more than double that of all other platforms in the Base platform combined.

Aerodrome Slipstream DEX Highlights

• Peak trading volume on Base’s DEX: For example, the WETH/USDC pair on Slipstream hit $1.51 billion in a week—many times more than Uniswap V3 on Base.
• Dominates ~90% of trading volume in concentrated liquidity DEXs on Base.
• Earned over a hundred thousand baht in fees per day, such as the day the fee record was reached ~$401k.

Aerodrome Slipstream has thus become the primary engine for liquidity depth and trading volume on Base. If you are interested in learning more about using veAERO, staking

No. 5 SushiSwap Decentralized exchange

SushiSwap is a decentralized exchange (DEX) with an automated market maker (AMM) that launched in 2020 on the Ethereum network and has since expanded to several other blockchains, including Polygon, BNB Chain, Avalanche, Arbitrum, and Optimism.

Highlights of SushiSwap DEX

1. AMM Protocol
   Uses smart contracts to match trades without a middleman. Users can exchange tokens directly through liquidity pools.
2. Multi-Chain Support
   Supports multiple blockchains, enabling users to transact across networks.
3. SUSHI Token
   Used as a governance token, allowing holders to vote on project direction.
   Used as a reward for liquidity providers.
4. Additional Services
   Kashi: Asset Lending and Borrowing Platform
   MISO: Token Launchpad

To be honest, Uniswap’s popularity has been declining steadily, as it hasn’t seen any significant breakthroughs to attract the general public.

Top5 Decentralized exchange Summary

PancakeSwap has become the world’s largest DEX with the largest market share on the BNB Smart Chain. It is followed by Uniswap on Ethereum, Orca on Solana, Aerodrome SlipStream on Base, and SushiSwap, which spans multiple networks. All focus on decentralized, secure, and transparent token exchanges, with various additional features designed to increase revenue opportunities for liquidity providers and DeFi users.

Reference: Verster Community

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